The latest “Global Collections Review” survey, shows a new trend amongst businesses when picking a debt collections agency. Unlike in the past year, companies put more attention on the agencies’ success rate, and less on the price.
This trend can be seen amongst numerous major European countries and shows a mindshift in European businesses seeking support from outside agencies when collecting outstanding debt. The success rate of a debt collections agency easily allows comparison between collection agencies’ performance. The success rate is defined as the value of collected payments of the total debt received and expressed as a percentage. The amount excludes insolvencies and withdrawals.
Successful debt collections and ensuring solvency is fundamental to business. The study has made known the choice of a collection agency is made based on its quality, meaning the way it performs and ability to succeed in collecting, and not cost.
The ability of external debt collection agencies to deliver results is the key factor for businesses to employ a debt collections agency.
With the economy picking up and staff busy focusing on incoming business, collecting debt can again be seen as a task that is more frequently handed over to external agencies.
Leader in usage of external debt collections agencies is the Netherlands where 65% of the surveyed businesses have used this service and is significantly higher than in countries, such as Spain which remains at a low 20%.
Broken down by sectors, companies operating in the financial services sector seem to use a debt collections agency more often while in the other sectors, such as manufacturing, wholesale and retail trade and distribution, services, companies have a preference towards collecting internally.
In general , European attitudes relating to the selection of debt collection agencies were noticeably similar, which shows that the requirements, expectations and high standards requested of agencies are steady factors irrespective of business location, size or type.
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